By John Helmer, Moscow

Never let it be said that in Russia deeds done out of the goodness of the heart go unnoticed by the state. Nup. Not even when philanthropies are paid for with cash accumulated in violation of the state’s policy of deoffshorization. Nup, nup. There is even a special award minted by the Kremlin and intended to recognize the good which offshorizers do in friendship for Russia. Called the Order of Friendship, the ribbons are blue and black, colours which appear on no flag of any country in the world, and symbolize thereby the freedom of the blue sky and the black hole in which we are all obliged to dwell beneath.
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by John Helmer - Monday, December 23rd, 2013
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By John Helmer, Moscow

It was a specialty of the Chicago Irish at the turn of the 20th century. A Mickey Finn was a drug that was slipped into your cocktail without your knowing, in order to incapacitate you. When you came to, the only thing you knew was that you were missing your valuables. The eponymous Mickey Finn was a pickpocket who built his capital into a thriving business as the proprietor of the Lone Star Saloon and Palm Garden on the corner of Dearborn and Harrison Streets. (It’s a Starbucks nowadays. The girls Mickey used as lures now drink skinny lattes.)

Maxie Finn, aka Maxim Finsky (left front), is eponymous too. He is a childhood friend of Mikhail Prokhorov (left back), and he has been employed by him to buy assets on the cheap; consolidate them into special purpose vehicles which the two of them then try to resell. They’ve had one signal success. That was when Prokhorov jointly controlled Norilsk Nickel, Russia’s largest mining company, with Vladimir Potanin. Finsky was employed to spend Norilsk Nickel’s money on buying goldmining assets at premium prices before they were spun off and separately listed as Polyus Gold. Finsky spent foolishly, or worse, read this. But no matter. The rise of the price of gold drove the share price of Polyus Gold ten times and more above the amount paid for its assets. For the ups and downs in that decade-long story, read here.
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by John Helmer - Friday, December 20th, 2013
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By John Helmer, Moscow

Evraz, the steelmaking group owned by Roman Abramovich (third figure from left) and Alexander Abramov (fourth from left), has just issued a notice to the Johannesburg Stock Exchange that it has been unable to complete the proposed sale of its South African unit, Highveld Steel & Vanadium, by a December 31 deadline. First announced on March 27, the heavily indebted Evraz said the terms of sale for its 85% shareholding in Highveld called for the acquiror, a South African company called Nemascore, to pay a purchase price of $320 million. Prior to the deal announcement, the Evraz stake had been valued in the market between $106 million and $135 million. Since March the market value of the stake has failed to reach 50% of the transaction price; it is currently just $138.4 million.

The new announcement acknowledges that closure of the sale has been postponed three times already, and that six cautionary notices have been issued to the Johannesburg market. Neither Evraz nor Nemascore has explained the reasons for the delay, claiming this is prevented by a non-disclosure agreement covering their deal. In its December 19 announcement, Evraz claims that a “due diligence process is still progressing”, and that the “Transaction is expected to be concluded towards the end of Q1 2014.” The story of Nemascore and its ties to the South African President, Jacob Zuma, can be read here.
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by John Helmer - Friday, December 20th, 2013
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By John Helmer, Moscow

Lights! Camera! Action!
Oleg Deripaska, chief executive of the Russian state aluminium monopoly Rusal (title image), calls his security men to a meeting in a soundproof room he’s decorated with a collection of west African masks on the walls. Clicketty-click the subtitle rolls on to the screen, MOSCOW 2009. “Whaddya know about Levinson?” he barks softly. “Who we know in Tehran? Whad’ll it cost us to spring him? Don’t come back if you’ve got nothing.” Deripaska’s threat fades to inaudibility. That’s the cue for the agents, veterans of the old KGB and GRU, to slip wordlessly away, their faces locked in hatchet grins.

Cut to the bar at the Hilton—clicketty-click: TYSONS CORNER, VIRGINIA, 2009 — suspended glass, flashy steel, gold lighting, cocktail chatter. A woman arrives out of breath, complaining to the man and the woman who are already seated, staring into their short bourbons instead of looking up. “Sorry”, she sputters. “Dolley Madison was backed all the way up.” “What’s this about the Russian?” the man whines. “Awright already”, she says. “We need one to catch one. Deripaska says he can buy Levinson out of Iran. Do we task him?”
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by John Helmer - Tuesday, December 17th, 2013
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By John Helmer, Moscow

Andrei Melnichenko has extra reason to be concerned about the sunlight — and we aren’t talking financial transparency. The owner of Eurochem, a large Russian producer of fertilizers, says he has evidence that sunlight on his surfaces reveals rash, blotches, separations, lines, starring and sagging. He says he’s paid to see his face reflected on the surfaces, but because the job has been botched, he can’t. The damage he is estimating at $100 million.

That’s not Melnichenko’s person we are talking about, but the surfaces of his boat, a motor yacht named A, after his wife Alexandra, and owned by the two of them through a succession of offshore companies, starting with Niedes Ltd. of British Virgin Islands, A Yacht Charter Co. of Isle of Man, and currently Bermuda Yachts Ltd of Bermuda.
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by John Helmer - Sunday, December 15th, 2013
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By John Helmer, Moscow

Interpipe, the heavily indebted Ukrainian pipemaker owned by Victor Pinchuk (centre), owes at least $120 million to Russian banks, led by state-owned Sberbank controlled by former Minister of Economic Development, German Gref (wall picture, left). But the Russian bankers are not represented in any of the loan restructuring negotiations which are currently under way, following Interpipe’s default on $106 million in debts owed to its international lenders on November 1.

The Russian debt and the Russian influence over Interpipe’s financial survival have been disclosed by Interpipe executives at a briefing for Interpipe’s Eurobond holders on December 9. The Russian loan agreements carry standard protective clauses allowing a call for full repayment when Pinchuk and his holding are in default to other lenders, suppliers, or creditors. If the Russians decide to do this, Interpipe’s executives acknowledge they cannot pay. They have less than $90 million in free cash at present, and admit they cannot borrow extra money.
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by John Helmer - Friday, December 13th, 2013
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By John Helmer, Moscow

The Russian Government has decided that state-owned United Shipbuilding Corporation (USC) may buy control of Novorossiysk Shipyard (NSY) from the Novorossiysk Commercial Seaport Company (NCSP), which is currently in the midst of bitter conflict between state shareholders and Ziyavudin Magomedov (picture, right). The takeover has been promoted by Dmitry Rogozin, deputy prime minister in charge of the military industrial complex, as a solution to the ship repair requirements of the Russian Navy whose operations are growing fast in the Mediterranean, as well as the Black Sea.

The takeover move is also backed by Transneft, the crude oil pipeline company, and Russian Railways, which already control about 41% of NCSP’s shares; and by Rosneft, the state oil exporter, which is bidding to acquire the remaining 20% stake which the state holds in NCSP. A beneficiary of their alliance is Gennady Timchenko; his Gunvor oil trading group controls the new Ust-Luga oil terminal on the Gulf of Finland, to which increasing crude oil volumes have been directed by Transneft, cutting tanker shipments out of Primorsk by more than 20% this year, compared to 2012. Primorsk was merged with Novorossiysk in 2011. Because of the competition from Ust-Luga, Primorsk is now loading tankers at its lowest volume in more than five years.
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by John Helmer - Friday, December 13th, 2013
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By John Helmer, Moscow

For the first time Alrosa, the state-owned diamond miner, has come out in public and said it wants to buy Grib, the only commercially developed Russian diamond mine owned by LUKoil and its chief executive, Vagit Alekperov. Why it should say so now, when earlier announcements by Alrosa have veiled the target and concealed sale and purchase talks with LUKoil a year ago, isn’t clear.

“If the asset proves to be interesting,” said Igor Kulichik, Alrosa’s chief financial officer, “and if we agree on the price then we are prepared to discuss with Lukoil the purchase of this asset.” Kulichik was briefing sector analysts on Alrosa’s third-quarter financial results on December 5. He was explicitly asked about the Grib sale by a VTB analyst. “We know this asset quite well and we follow it. Yes, Lukoil is targeting to commence production and beneficiation early next year and in the next year they are targeting to already sell from there. We discussed with Lukoil a potential sale of that pipe about a year ago. But our geologists find it difficult to assess exactly what raw material is there in that pipe. So we decided not to rush, basically to let Lukoil start production there, see what comes out of that pipe, see how it develops and then to consider the potential purchase of the asset.” Kulichik made his comment on December 5; Alrosa published the transcript five days later.
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by John Helmer - Tuesday, December 10th, 2013
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By John Helmer, Moscow

Russian justice being what is, it is exceptional when the chief executive of a company owned by Oleg Deripaska (right) is arrested and carried off to prison on charges of fraud.

As the days lengthen through which Deripaska’s man must spend behind bars – 16 as of today — interrogated by the Investigative Committee of the General Prosecutor, the likelihood grows that it is Deripaska himself who is the real target. Sources familiar with the matter claim this is the preliminary for an event being planned once the Winter Olympic Games conclude in Sochi on February 23. Not the ski jump, though: the sources claim this time it’s Deripaska for the high jump.
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by John Helmer - Sunday, December 8th, 2013
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By John Helmer, Moscow

Victor Pinchuk, the owner of Interpipe, the Ukrainian steelmaker which defaulted on its debts on November 1, has called his first-ever public business meeting. The date is December 9, and the meeting will be telephonic. Deutsche Bank, which is acting as trustee for Interpipe’s $200 million Eurobond issue, is promising to answer questions about the company’s financial collapse, and provide a copy of the debt repayment agreement Pinchuk has with his banks.

Those attending the meeting will not be able to read Interpipe’s presentation until the start of the conference call. They will then have just 60 minutes to read, ask their questions, and listen to the answers. According to Deutsche Bank, the conference call will “last no more than one hour.”
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by John Helmer - Thursday, December 5th, 2013
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